State sells $127 million in bonds, doubling funds available for capital projects

PORTLAND, Maine — The state sold $127 million in general obligation bonds in a competitive bid, generating $14.7 million more than the bonds’ face value and doubling the amount of state funds available for voter-approved capital projects.

State Treasurer Neria Douglass said in a statement the sale of state debt will fund millions of dollars’ worth of infrastructure projects, research and development, and other projects.

The bonds sold in two groups, for tax-exempt and taxable projects supported by voter-approved borrowing. Bonds supporting tax-exempt projects, valued at $72.9 million, sold to Raymond James at a total interest cost of slightly more than 2 percent with a bond premium of $14.7 million.

Bonds supporting taxable projects, valued at $40 million, sold to JPMorgan Chase & Co. at approximately 0.93 percent interest with a bond premium of $61,164.

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“I was pleasantly surprised but rather expected a good deal,” Douglass wrote in an email. “Maine has been out of the market for a while, and many investors like our bonds.”

Last week, credit ratings agencies Standard & Poor’s and Moody’s Investors Service affirmed their ratings of the state’s credit and Moody’s upgraded its outlook on the state’s finances to from negative to stable.

Douglass said projects supported by Thursday’s bond sales include $41 million in highway and bridge work; $13.6 million for port, harbor and railway improvements; $6.5 million for classroom and laboratory upgrades in the University of Maine System; and $4.3 million to replenish a revolving loan fund for wastewater treatment facilities. The borrowing was approved during statewide votes between 2009 and 2013.

The funds will replenish a $65 million bond anticipation note the state took out to give early funding to certain projects; the rest will become available for other projects after closing of the sale June 24.